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Higashi v. Takazawa

United States District Court, D. Hawaii

July 19, 2017



          Leslie E. Kobayashi United States District Judge.

         On July 5, 2016, Appellant Sterling G. Higashi (“Appellant”) appealed from the bankruptcy court's Findings of Fact and Conclusions of Law (“FOF/COL”), issued on June 7, 2016, and the Judgment, issued on June 21, 2016, in Adversary Proceeding Number 15-90033 (“Adversary Proceeding”). The bankruptcy court filed the Certificate of Readiness on August 29, 2016. [Dkt. no. 3.] On October 28, 2016, Appellant filed his opening brief, and on October 31, 2016, Appellant filed an errata to his opening brief (collectively “Appellant's Brief”). [Dkt. nos. 13, 15.] On November 16, 2016, Appellee Hale Takazawa (“Appellee”) filed his responsive brief (“Appellee's Brief”).[1] [Dkt. no. 17.] Appellant filed his reply brief on November 30, 2016. [Dkt. no. 21.] The Court finds this matter suitable for disposition without a hearing pursuant to Local Rule 7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). In an Entering Order filed on March 30, 2017 (“3/30/17 EO”), the Court denied the appeal and affirmed the decisions and judgment of the bankruptcy court. [Dkt. no. 27.] The instant Order supersedes the 3/30/17 EO. The bankruptcy court's FOF/COL and Judgment are affirmed for the reasons set forth below.


         The following facts are undisputed. The adversary proceeding took place on May 24 to 26, 2016. [FOF/COL at 1.[2] In January 2010, Halawa Pacific sold a commercial property in Aiea, Hawai`i (“the Property”) to Active Sportswear, Inc. (“Active”). [Id. at 2.] Appellant had leased space at the Property since 2006 for his company, Electric Vehicle Technologies, LLC (“EVT”). When Active purchased the Property, EVT was $90, 000 behind on rent. In March 2010, Active informed EVT that, if EVT did not become current on its rent, Active would terminate the lease. [Id.] On March 31, 2010, Appellant met with Active, and he: “agreed that EVT would immediately pay the rent for February, March, and April 2010, pay its current rent for subsequent months in a timely manner, and pay off the delinquent rent for months prior to February 2010 in 24 monthly installments of $4, 000 each, beginning on September 15, 2015.” [Id. at 2-3.] In addition, Appellant agreed that he and his wife, Victoria Higashi, would sign a promissory note for $95, 269.60, “evidencing the agreement.”[3] Active “insisted that Mrs. Higashi sign the note because she held title to the residence in which Mr. and Mrs. Higashi lived.” [Id. at 3.]

         Appellant delivered the signed Promissory Note to Active on April 8, 2010. However, Mrs. Higashi never signed the Promissory Note. In the Adversary Proceeding, the bankruptcy court found:

The signature was undoubtedly forged, and [Appellant] is the only remotely plausible suspect. He, and only he, had the motive to do so. Unless he produced his wife's signature on the promissory note, EVT would have been evicted and he would have been out of business. He also had the opportunity to do so; he had access to numerous examples of his wife's signature which he could have copied. Further, the numerous contradictions in his sworn testimony and discovery responses make it difficult to give full credence to his trial testimony.

[Id. at 4.]

         Thereafter: EVT failed to pay the May 2010 rent; Active terminated EVT's lease and took possession of the rental space on May 25, 2010; Active assigned the Promissory Note to Appellee;[4] and, on June 28, 2011, Appellee demanded payment on the Promissory Note. [Id. at 6.] In response to Appellee's payment demand, Mrs. Higashi informed Appellee's attorney that she did not sign the Promissory Note. Appellee sought relief in state court, where the judge found that Mrs. Higashi had not signed the Promissory Note. [Id.] Appellant and Appellee were able to reach a settlement agreement in the state court proceeding, which, inter alia, dismissed the complaint against Mrs. Higashi with prejudice and included a “stipulated judgment against [Appellant] and EVT on the promissory note” (“State Court Settlement”).[5] [Id. at 6-7.]

         The bankruptcy court concluded that the debt Appellant owed on the Promissory Note was not dischargeable, pursuant to 11 U.S.C. § 523(a)(2)(A). [Id. at 7-11.] In addition, the bankruptcy court rejected Appellant's duress argument and his contention that the debt owed was misstated in the Promissory Note. [Id. at 11-12.] Finally, the bankruptcy court concluded that the State Court Settlement did not bar Appellee from seeking to prevent discharge of the debt owed on the Promissory Note. [Id. at 12-13.]


         This Court has stated:

This court reviews a bankruptcy court's findings of fact for clear error and its conclusions of law de novo. See In re Kimura (United States v. Battley), 969 F.2d 806, 810 (9th Cir. 1992) (“The Court reviews the bankruptcy court's findings of fact under the clearly erroneous standard and its conclusions of law de novo.”). The court “must accept the Bankruptcy Court's findings of fact, unless the court is left with the definite and firm conviction that a mistake has been committed. Mixed questions of law and fact are reviewed de novo.” In re JTS Corp., 617 F.3d 1102, 1109 (9th Cir. 2010) (quotation marks and citations omitted).

In re Lee, CIVIL NO. 15-00278 SOM/RLP, 2015 WL 7274035, at *1 (D. Hawai`i Nov. 17, 2015). The United States Supreme Court has stated:

[a] finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. This standard plainly does not entitle a reviewing court to reverse the finding of the trier of fact simply because it is convinced that it would have decided the case differently. The reviewing court oversteps the bounds of its duty under Fed.R.Civ.P. 52(a) if it undertakes to duplicate the role of the lower court. In applying the clearly erroneous standard . . ., [reviewing] courts must constantly have in mind that their function is not to decided factual issues de novo. If the [lower] court's account of the evidence is plausible in light of the record viewed in its entirety, the [reviewing court] may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.
Anderson v. City of Bessemer, 470 U.S. 564, 573-74 (1985) (some alterations in Anderson) (citations and some internal quotation marks omitted). The standards described in Anderson apply when a district court reviews the factual findings of a bankruptcy court. See, e.g., Ingram v. Burchard, 482 B.R. 313, 322 (N.D. Cal. 2012); In re Daewoo Motor Am., Inc., 471 B.R. 721, 732 (C.D. Cal. 2012), aff'd, 554 Fed.Appx. 638 (9th Cir. 2014); In re Folsom, Civil No. 10CV2440 L(NLS), 2011 WL 3489681, at *1 (S.D. Cal Aug. 8, 2011), aff'd sub nom., Folsom v. Davis, 513 Fed.Appx. 651 (9th Cir. 2013).

Sebetich v. Woods (In re Woods), CIVIL 15-00233 LEK-BMK, 2016 WL 8710426, at *4-5 (D. Hawai`i Jan. 29, 2016) (alterations in In re Woods).


         I. Issues on Appeal

         The Notice of Appeal purports to challenge the: (1) Judgment entered pursuant to the FOF/COL; (2) Order Denying Defendant's Motion to Dismiss Complaint; (3) Memorandum of Decision on Defendant's Motion for Summary Judgment; (4) Order Denying Motion to Disqualify Plaintiff's Attorney; (5) Order Granting Plaintiff's Motion for Summary Judgment on the Counterclaim; and (6) Order Granting Plaintiff's Motion for Partial Summary Judgment as to Specified Defenses.[6] See Notice of Appeal at 1. While Appellant's Brief mentions these rulings, see Appellant's Brief at 4-9, it only presents argument on the FOF/COL, see, e.g., id. at 15 (“Plaintiff failed to prove by a preponderance of the evidence the 4th and 5th elements of the proof required under § 523(a)(2) of the Bankruptcy Code in order to hold a debt ‘non-dischargeable'”). Pursuant to Fed.R.Bankr.P. 8014(a), an appellant's brief must contain, inter alia,

(5) a statement of the issues presented and, for each one, a concise statement of the applicable standard of appellate review;
(6) a concise statement of the case setting out the facts relevant to the issues submitted for review, describing the relevant procedural history, and identifying the rulings presented for review, with appropriate references to the record;
(7) a summary of the argument, which must contain a succinct, clear, and accurate statement of the arguments made in the body of the brief, and which must not merely repeat the argument headings; [and]
(8) the argument, which must contain appellant's contentions and the reasons for them, with citations to the authorities and parts of the record on which the appellant relies[.]

See also Lumetta v. Arborlake Homeowners Ass'n, Case No.: 16cv1817-AJB (JLB), 2017 WL 1967327, at *5 (S.D. Cal. May 12, 2017) (stating that, because many of the appellant's arguments in the opening brief did not comply with Rule 8014(a), the district court deemed them waived); In re Sedwick, 560 B.R. 786, 791-92 (C.D. Cal. 2016) (“Appellant identifies six issues for consideration in this Appeal. Nevertheless, many of the issues overlap significantly, and Appellant has not directly addressed all of the issues in his Opening or Reply briefs. Accordingly, the Court will not individually discuss all six issues.” (citation and footnote omitted)); Viola v. Kirsch, Case No. 16-cv-02006-EMC, 2016 WL 4011314, at *4 (N.D. Cal. July 27, 2016) (finding an appellant's challenge to the bankruptcy court's orders frivolous because, in part, the appellant's “opening brief does not contain any substantive argument as to why the bankruptcy court's orders were improper”). Accordingly, the Court will only consider Appellant's challenge to the FOF/COL, and any other appeal of a bankruptcy court order is deemed waived.

         II. Appellant's ...

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